Much of the literature on airline cooperation focuses on the price effects of cooperation. A key contribution of our paper is to empirically examine the product quality effects of airline cooperation. Two common types of cooperation among airlines involve international alliances and antitrustimmunity (ATI), where ATI allows for more extensive cooperation. Additionally, this paper examines the extent to which domestic mergers affect the quality of international air travel products. The results suggest that increases in the membership of a carrier’s alliance or ATI partners and domestic mergers are associated with the carrier’s own products having more travel-convenient routing quality. Therefore, a complete welfare evaluation of airline cooperation and mergers should not ignore product quality effects.
Airlines wanting to cooperatively set prices for their international air travel service must apply to the relevant authorities for antitrustimmunity (ATI). Whether consumers, on net, benefit from a grant of ATI to partner airlines has caused much public debate. This paper investigates the impact of granting ATI to oneworld alliance members on their price, markup, and various measures of cost. The evidence suggests that implementation of the oneworld alliance without ATI did not have a statistically significant impact on the markup of products offered by the members, and there is no evidence that the subsequent grant of ATI to various members resulted in higher markups on their products. We find evidence suggesting that the grant of ATI facilitated a decrease in partner carriers’ marginal and fixed costs. Furthermore, member carriers’ price did not increase (decreased) in markets where their services do (do not) overlap, implying that consumers, on net, benefit from the grant of ATI in terms of price changes.
International alliances have become a permanent fixture in the airline industry. Spurred by a desire to provide seamless international service in a world that prohibits most cross-border airline mergers, alliances first emerged in the early 1990s. With a dramatic expansion and some reshuffling of memberships, alliances now carry the great majority of international passengers, with traditional interline trips on nonaligned carriers fading in importance, especially across the Atlantic. 1 But despite the key role that alliances play in international travel, they are still frequently embroiled in regulatory controversy. The recent bid for antitrustimmunity (ATI) by American Airlines (AA), British Airways (BA) and Iberia (IB), for example, was praised by its advocates for the better integration of the oneworld alliance, while simultaneously being criticized by other interested parties as anticompetitive.
We emphasize that our tentative decision to afford immunity for the non-New York-Toronto routes should in no way be interpreted to suggest any relaxation of our policy regarding antitrustimmunity. Rather, our decision is premised on the uniqueness of the Canadian case, not only for the reasons noted above, but also because of Canada’s unique geographic relationship with the United States, and the vast and various networks of land transportation alternatives available between the U.S. and Canada, a competition force absent in transoceanic markets. Absent all of these factors, the Department would not be favorably disposed to providing immunity to the U.S.- Toronto routes prior to February, 1998. We are aware of no present or potential situation in Europe or elsewhere that presents the many extraordinary factors in the Canadian case, and on which we rely here, to afford a grant of immunity during a short-term phase-in period.
tally friendly firm a higher input price than it does the environmentally unfriendly firm. Antitrust policy shifts the production from the environmentally unfriendly firm to the environmentally friendly firm, while maintaining the aggregate output at the same level. This resolves the production ineﬃciency, which is captured by the term, P β i ∆q i < 0.
Proposition 6 and Claim 22 imply that any firm in “active cartel” would not reveal cartel evidence to antitrust authority because it can get the highest expected payoff by sticking to cartel agreement. Put it differently, “active cartel” has an incentive device to block whistle- blow by cartel members in itself. On the other hand, Proposition 6 and Claim 19 say that leniency application is made when there happens a shock on the equilibrium path, and this leniency notice is applied by all cartel members. In other words, “dying cartel” cannot sustain the incentive device to block leniency any longer. These results explain two facts that I addressed in the introduction: why most leniency applications are made by “dying cartels” and there is a simultaneous “rush to report” if cartel collapses. In short, these two facts are equilibrium outcomes of firms’ leniency decision in this duration model.
Ronwin led to a series of lower court opinions upholding ABA or state bar regulations via state action immunity. For example, in Lawline v. American Bar Association, Lawline sued the ABA, the Illinois Supreme Court, and various other bar regulatory authorities under antitrust law. The suit claimed that Model Rule 5.4 (which bars lawyers from joining in partnerships with non-lawyers) and Rule 5.5 (which prohibits lawyers from assisting in the UPL) violated the Sherman Act. 34
Antitrust and Consumer Protection SMU Law Review Volume 64 | Issue 1 Article 4 2011 Antitrust and Consumer Protection A Michael Ferrill Leslie Sara Hyman Soledad Valenciano Follow this and additional[.]
The remainder of the paper is organized as follows. Section 2 introduces the preliminary model, taking …rst, prices as constant. We present a number of examples to illustrate di¤erent outcomes in di¤erent variants. Section 3 introduces price reaction by employing a downward sloping demand function. Here we also compute the welfare loss due to restricted competition estab- lished through competition restricting investment. Section 4 studies antitrust and competition policy as resulting from our theoretical and numerical study. Section 5 concludes the paper. The appendix gives a brief summary of the dynamic programming method used to solve some of our model variants.
Antitrust and Consumer Protection SMU Law Review Volume 65 | Issue 2 Article 5 2012 Antitrust and Consumer Protection Michael Ferrill Leslie Sara Hyman Soledad Valenciano Follow this and additional wo[.]
For the existing set of telecom-antitrust cases, the issue of whether to require proof of market power makes little practical difference. The ILECs have it, and plaintiffs will be able to prove it. As long as some element of local telephone service is best provided by a single company, the ILECs are likely to maintain their market power. Indeed, Congress may have assumed that local loops connecting individual customers to the telephone system would be impossible to duplicate, leaving ILECs with long lasting market power despite the emergence of competition. But that could change. PCS or cable telephone service could emerge as effective competitors to local loop service. Should that happen, a court would need to carefully consider the impact of treating ILEC-specific duties as anticompetitive. For example, would requiring interconnection at any technically feasible point within the ILEC’s network serve the same competitive ends if the ILEC no longer had market power? Maybe not. Congress chose not to impose that duty on local carriers unlikely to have market power. Conversely, effective competition might nonetheless require one system to serve as a hub to which others can interconnect at any feasible point. Answering that question will require a careful analysis of the evolved technological options that will then exist. Until it can be conclusively demonstrated that ILEC-specific duties would enhance competition even if the ILEC has no market power, antitrust plaintiffs should be required to prove that an ILEC has market power.
Antitrust and Consumer Protection SMU Law Review Volume 63 | Issue 2 Article 5 2010 Antitrust and Consumer Protection A Michael Ferrill Leslie Sara Hyman Soledad Valenciano Follow this and additional[.]
Dating back to 1890, when the first major antitrust law was enacted in the form of the Sherman Act, the U.S. has perhaps had the richest history of antitrust enforcement with a complex confluence of economic, legal and political forces producing ebb and flow in enforcement. 1 As described in Harrington (2006): “Antitrust enforcement is the process by which a more competitive environment is created through the prohibition of certain practices deemed illegal by antitrust laws.” More broadly, the objectives of antitrust can be thought of as fostering competitive markets and promoting innovation, with implications for prices, welfare and economic growth. While historically the US has had active enforcement, 2 the recent past has seen competition policy gaining emphasis in other parts of the world. The European Union has seen important changes in the enforcement of collusion and mergers, and calls for greater vigilance to ensure competitiveness. 3 Japan and Australia have put new emphasis on competition policy and debated harmonizing laws with major trading partners (Cassidy (2001), Homma (2002), OECD (1999) and Richardson and Graham (1997)). Against the backdrop of the historical US perspective, the changing global emphasis and the potential role played by competition policy in shaping the competitive dynamism of economies, the primary objective of this paper is to examine how changes in intellectual thinking, shifts in the legal landscape and political forces have influenced the intertemporal path of antitrust enforcement by the Antitrust Division of
Antitrust and Consumer Protection SMU Law Review Volume 62 | Issue 3 Article 3 2009 Antitrust and Consumer Protection A Michael Ferrilll Leslie Sara Hyman Caleb Rackley Follow this and additional work[.]
Antitrust - Plaintiff in Private Antitrust Action Held In Pari Delicto Antitrust - Plaintiff in Private Antitrust Action Held In Pari Delicto and Therefore Without Standing to Complain of Injuries Sustained and Therefore Without Standing to Complain of Injuries Sustained by an Agreement to Which He Was a Party and Which Contained by an Agreement to Which He Was a Party and Which Contained Terms Allegedly in Violation of Antitrust Laws. Perma Life